In this sense, Jacob Silverman, coauthor of Easy Money: Cryptocurrencies, Casino Capitalism, and the Golden Age of FraudThe TRUMP Coin setup bears some characteristics of a “classic memecoin pump-and-dump” – a maneuver whereby an issuer holds large amounts of its coin, promotes the project, then cashes in its holdings. , devalues the coin and other investors are facing huge losses. “When you have insider distribution of 80 percent, the risk is that it will be thrown out to the public or there will be some kind of big sale. On a large scale. That's a huge red flag,'' Silverman alleges. “Unfortunately, some poor plants are going to get wet.” (Pump-and-dump captures somewhat legal gray areaLegal experts say so, but it is condemned as ethically questionable.)
It appears that Melania Trump's decision to release her own memecoin has already shocked Trump investors, even absent any alleged potential pump-and-dump. After Melania Coin goes live, Trump Token 50 percent drop in price,
Among them are a string of unofficial Trump-inspired memecoins. asked for, Maga Hat, doland tramp And super trump-The price has also declined. During the 2024 election cycle, political memecoins were used Proxy for betting on the outcome of the election and expressing support for a particular candidate, rising and falling with events on the campaign trail. But TRUMP's launch has inadvertently decimated investors who purchased unofficial coins as a symbol of their support for Trump.
“I don’t think it’s appropriate for the President of the United States,” says Steven Steele, marketing director of MAGA Token. Video Posted on X. “It just seems like a blatant money grab.”
Perhaps even more dangerous than the financial losses suffered by supporters, Silverman claims, the Trump memecoin could also serve as a new vector for bribery. They allege that by investing large sums of money in the cryptocurrency, in which Trump has a large financial interest, thereby driving up its price, politically motivated actors could curry favor with the President without any type of direct transaction. Silverman claims, “These are a kind of channels for influence and leverage that we haven't really seen before.”
The release of the official Trump Memecoin marks the latest development in the president's ongoing flirtation with crypto. Although in his first term Trump described Bitcoin as “scam“He made a complete turnaround in the lead up to the 2024 presidential election. As crypto industry leaders supported his presidency And donated millions of dollars In pro-crypto super political action committees, Trump began presenting himself as “crypto president,
in July, talking to thousands of bitcoiners At a conference in Nashville, Tennessee, Trump promised to turn the US into the “crypto capital of the planet” and establish a national.bitcoin reservesIf re-elected. Then in September, the Trump family helped launch a new crypto business, World Liberty Financial, which they pitched as a way to “make finance great again.” (It is unclear what services World Liberty Financial will provide.)
World Liberty Financial was faced with doubt by some members of the crypto industry, who were concerned that the project could cause losses among investors and permanent reputational damage if it failed. The same logic applies to Trump Memecoin. “If it completely blew up in a lot of people's faces, it would be much worse, because the media attention would be negative,” Bendixen says.
Yet for all the potential outcomes, there is little to stop Trump from testing the boundaries of what is acceptable with crypto, as others have done before him, says Silverman. especially as he Preparation to overhaul SECfinancial regulator who Driven the crypto industry forward in the most energetic manner Under the previous administration.
“In some ways, he’s just another crypto entrepreneur,” says Silverman. “He just happens to be president.”